DOMINICAN REPUBLIC - Finance
Director, Banco Peravia
Born in Venezuela, Gabriel Jiménez Aray has over two decades of experience in the fields of law and consultancy, and has focused much of his career on issues related to taxation of the financial sector and commerce. He is a law graduate from the Universidad Católica Andrés Bello, and studied accountancy in the University of Central Florida before going on to complete courses at the University of Denver. In addition, he has studied banking and finance in what is now the London Metropolitan University. He has worked in the court system in Venezuela, and subsequently as a private lawyer and legal advisor for major public and private clients. He has also held positions in various other companies such as Información Aplicada Inc., International Legal Service Inc., and Ducati Miami.
Being from Venezuela, we have experienced a political transformation over the past 15 years. One of the good things about transformation is that it opens the eyes of entrepreneurs. We define a good country as one where wealth is distributed. Most people in these countries survive on microfinance; however, in most cases the interest rates are at 10% per week, sometimes 1% a day. This creates a harsh loan environment in the micro world for ordinary people, who are often unable to source sufficient funding for their micro business. In the Dominican Republic, 70% of internal production derives from micro business, but less than 10% of those people are banked. The banking system, therefore, is overlooking the bulk of the economy generating most of the national wealth. What we bring from Venezuela is our experience of linking all sides in better dialog.
We wanted to make a tangible impact in the micro business. If you come to us for a loan of Ps2,000 ($50), you do not want to wait two weeks for it to be approved. And if you come for an even higher loan of Ps8,000 to repair your taxi, for example, waiting spells lost revenue. We issue credit on the spot.
The regular form of business is to open branches, but that means overheads. We acquire the efficiency of a network by accessing more than 2,000 “Colmados,” or convenience stores, which deliver us to our target community without the expense of dedicated branches. This said, we have been opening a few for visible presence. When we acquired the bank, it had only one branch, but now has nine.
For insurance companies, their base clients are not consumers, but those that sell the insurance, such as the brokers. Ultimately, very few people call the insurance company; they call the broker. Therefore, insurers arrange new products for brokers to promote and sell. This is what we do in the micro world. We use the agents to sound out the needs of the community. Once I receive information, I try to create a forum for one product to approach and satisfy that need. It is a complete cycle, and a social approach that comes from Venezuela. Not everybody has the same standard of living, or indeed the same perception of what this means. You cannot assess a good standard of living solely in terms of owning consumer electronics, or an air-conditioned home. A good standard of living is having a secure and sustainable lifestyle.
Something that I have noticed in my three-and-a-half years here is a change in the banking sector. One reason for that change is competition from abroad, which the major players are aware of. This sees the banks competing more aggressively today in response, one result of which is a wider range of products on offer at even lower interest rates.
Some of the larger banks have already started merging, buying time to prepare for the competition that comes with more experience and funds. The banking sector has to reduce the offer. All banks are players, but, globally speaking, they need to focus on the banking offer. With increased minimum capital requirements, we will see more merging or leaving the market, which we are preparing for. Today, we are third in our niche, having risen from 17th place in less than three-and-a-half years. We have over $40 million in assets, ranking us above most banks engaged in multi-banking. Our paid-in capital is also among the highest and three times the threshold stipulated for the multi-banking universe. We are steadfastly progressing to the next step, which we will hopefully reach in 2014, namely entering that universe.
DOMINICAN REPUBLIC - Finance
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DOMINICAN REPUBLIC - Health & Education
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